Michigan sues HP after 'botched' $49m upgrade leaves US state in 1960s mainframe hell

Five-year project is five years late, no sign of ported apps

Michigan is suing HP after the state government grew tired of waiting for the tech biz to fulfill an IT contract signed a decade ago.

Hewlett Packard had agreed to replace the US state's aging computer systems that power so much of the local government.

The tech firm signed a $49m contract back in 2005 to replace Michigan's 1960s-vintage mainframe with new computers in 131 offices. The project was supposed to take five years, but it's now five years late – and Michigan Secretary of State Ruth Johnson's patience has run out.

"I inherited a stalled project when I came into office in 2011 and, despite our aggressive approach to hold HP accountable and ensure they delivered, they failed," Johnson said. "We have no choice but to take HP to court to protect Michigan taxpayers."

The state has already paid HP $27.5m in fees and charges, but to date not a single mainframe app has been successfully ported to a more modern computer system. Johnson renegotiated the contract in 2011, with HP agreeing to new penalty clauses, but since then there has been no significant progress.

"The legacy system, which was largely built in the late 1960s with now-outdated programming languages, is costly to maintain and update," said Johnson. "The 2010 deadline for HP to deliver the system replacement was not met and the department continues to use legacy systems."

Part of that contract stated that if the contract was terminated then HP would still provide technical support for the Michigan Department of Technology, Management and Budget (DTMB) in the interim period. But after Johnson sent the firm a notice of termination in August, HP contractors have downed tools and refused to turn up for work.

"Our DTMB partners and I are gravely disappointed that this action to sue is necessary, but HP simply failed the state of Michigan," Johnson added. "Our focus now will be on looking for options that allow us to continue to provide the best possible service at the lowest possible cost to our customers."

Johnson claims HP has cocked-up agreements with other state governments to replace mainframe systems, citing ongoing disputes in California, Minnesota, New Jersey, New Mexico, and Vermont.

Could it be that HP is more interested in cutting staff than servicing customers? Surely there must be a channel company out there that could do better.

HP said in a statement that it "looks forward to a favorable resolution in court." ®

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